Feds slashed rates again...

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Eredar Warlock

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Down to a quarter percent. There was talk of expanding the government balance.

Thoughts/comments?
 
Negative real interest rates here we come! I can't wait until the bank pays me interest for my mortgage. ;-)
 
In spite of the higher target rate, the real rate hasn't been above like .3% for at least a month now, IIRC it was hovering at .1% even before the rate cut.

Still, we haven't seen the worst of this economic crisis yet.
 
This worries me a bit, because the Fed is essentially saying the dollar doesn't matter anymore - and that could spell massive inflation (I don't know numbers, but 15% would be probably be about right) if it doesn't act quickly to reverse this process once the recession ends. It's a precipitous balancing act that the Fed is creating for itself in the future, and I don't like it one bit.
 
Misty said:
This worries me a bit, because the Fed is essentially saying the dollar doesn't matter anymore - and that could spell massive inflation (I don't know numbers, but 15% would be probably be about right) if it doesn't act quickly to reverse this process once the recession ends. It's a precipitous balancing act that the Fed is creating for itself in the future, and I don't like it one bit.
Click to expand...

High inflation tomorrow is a LOT better than deflation today (or at any point in the future), IMO. And that's what we'd be looking at--and may still be looking at even with a funds rate of effectively zero.
 
Yes, they're more worried about deflation than inflation at this point. However, it's very tricky to time these things, so inflation will rear its ugly head in the future too.
 
Does this mean we'll have to go to the Euro?

Because that would make the "one world" pushers very, very happy.
 
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